PUNJAB NATIONAL BANK versus INDIAN BANK AND ANR.

Citation: [2003] 3 S.C.R. 836 · Decided: 22-04-2003 · Supreme Court of India · Bench: BRIJESH KUMAR · Disposal: Appeal(s) allowed

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Judgment (excerpt)

A 
PUNJAB NATIONAL BANK 
\~ 
INDIAN BANK AND ANR. 
APRIL 22, 2003 
B 
[BRIJESH KUMAR AND B.N. SRI KRISHNA, JJ.] 
Code of Civil Procedure, 1908; Order 6 Rule 17 r/w Section 151: 
Contract between Indian firm and foreign firm-Loan taken by Indian 
C firm ji·om foreign firm against bank guarantee-Enforcing of bank guarantee 
by the assignee bank on repudiation of the contract-Denial to encash bank 
guarantee-Assignee-Bank filing a suit for recovery-Application for 
amendment of pleading for gelling relief in foreign currency-Amendment 
allowed by Debt Recove1y Tribunal-Reversed by the High Court-On appeal, 
D Held: Since there has been indication of demand in foreign currency in the 
Plaint, there lies a claim for recove1y in foreign currency-Vagueness in the 
averments for such claim and decree in terms of foreign currency could be 
removed by amendment of the pleading-Amendment is clarificato1y in nature 
and not for revival of time barred claim-Nature of the suit not changed-
Relief not freezed-Hence the application is not ma/a fide in nature and thus 
E allowed-Effect of absence of certain facts in the averment could be considered 
at trial-A suit for decree in foreign currency may not be liable to be 
dismissed merely on the ground of failure to mention appropriate facts in the 
averment-Direction issued-Pleadings-Amendment of pleadings-Debt 
Recovery Tribunal Procedure Rules, 1987-Rule 7-Recovery of Debt due to 
F Banks and Financial Jnstillltions Act, 1993. 
G 
H 
Words and Phrases: 
'Amendment of pleading '-Meaning of in the context of suit for recovery 
in foreign currency. 
An Indian firm, entered into a contract with a foreign firm. The Indian 
firm took an advance from the foreign firm against the bank guarantee through 
the Respondent Bank. Later the foreign firm took loan from the Appellant 
Bank after assigning its rights in the bank guarantee in favour of the Appellant 
Bank. On repudiation of the contract, Appellant-Bank invoked the bank 
836 
P.N.B. v. INDIAN BANK 
837 
guarantee for recovery of balance unrecovered advance against the Respondent- A 
Bank and the firm. On denial of the payment, it filed a money suit against the 
Respondent Bank and the foreign firm. The Appellant-Bank also moved an 
application for amendment of pleading !lnder the provisions of Code of Civil 
Procedure and the Recovery of Debt Due to Banks and Financial Institutions 
Act for getting the relief in foreign currency (US Dollars) and for clarifications 
for getting relief in foreign currency only. The amendment was allowed by the B 
Debt Recovery Tribunal. However, the order was reversed by the High Court. 
Hence the present appeal. 
It was submitted for the appellant that while considering application for 
amendment of pleading the Court shQuld take into account all the averments C 
made in different parts of the Plaint/relief clauses etc. before arriving at a 
conclusion; and that there were categorical averments made seeking decree 
in foreign currency only. 
On behalf of the Respondent-Bank, It was submitted that the appellant 
has frozen its relief in the Plaint by demanding relief in foreign currency. 
D 
Allowing the appeal, the Court 
HELD: I. I. A suit, with a prayer for decree in foreign currency will not 
be liable to be dismissed for mere omission to make an averment that decree 
may be passed subject to permission of the FERA authorities or where it has E 
not been indicated while making an averment regarding valuation of the suit 
for court fee and jurisdiction. So far as the averment regarding an undertaking 
that the plaintiff would make good the deficiency in the court fee, absence of 
such an a\'erment would not be fatal to the prayer made for the amendment 
since such a direction can always be given by the Court and on failure to pay F 
the deficient court fee, the decree would be confined to the extent the court fee 
is paid. (845-G, H; 846-A, Bf 
Pirgonda Hongonda Patil v. Kalgonda Shidgonda Patil and Ors., AIR 
(1957) SC 363; Ganjam Jaikishan Joshi v. Prabhalar Mohan/a/ Ka/war, 
(1990( I SCC 166 and Sampat Kumar v. Ayyakannu and Anr., (2002( 7 SCC G 
559, relied on. 
Forasol v. Oil & Nawra/ Gas Commission, AIR (1984) SC 241, 
distinguished. 
L.J. Leach & Co. v. Mis. Jardine Skinner & Co. Lid., AIR (1957) SC H 
838 
SUPREME COURT REPORTS 
[2003] 3 S.C.R. 
A 357, referred to. 
B 
c 
1.2. In some paragraphs and in the caption of the cause title of the suit, 
rupee equivalent of US Dollars has been indicat

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